Mo. lawmakers pass $23 billion budget for next year

The Missouri Legislature gave final approval Thursday to a budget that cuts funding for colleges and universities and holds basic aid flat for public K-12 schools, an outcome that some lawmakers acknowledged was inadequate but defended as the best they could do given the state’s finances.

The $23.2 billion operating budget for next year now goes to Gov. Jay Nixon, who can veto or reduce expenditures but cannot add to them. Nixon said Thursday that the budget appears to spend at least $30 million more than he expects the state to receive in revenues and warned that he may have to make cuts.

Overall, the 2012 budget plan is about the same size as the 2011 budget approved last year, though Nixon cut about $300 million from the current year’s budget because of slumping tax revenues. Cuts of that magnitude appear unlikely in the 2012 budget plan, because tax collections have improved.

But Nixon’s budget director, Linda Luebbering, said the Legislature’s budget plan fails to account for an estimated $25 million in revenues that likely will be lost next year as a result of a newly passed law that gradually phases out Missouri’s tax on corporate assets. She also cited several smaller spending items contributing to the estimated $30 million gap.

Lawmakers insisted their budget plan was balanced.

“It’s an excuse to withhold (money) and not a necessity,” said House Budget Committee Chairman Ryan Silvey, R-Kansas City.

Even so, growth in mandatory programs such as the $8.4 billion Medicaid health care plan for the poor meant that lawmakers had to forego increases or make reductions to other government programs and services for the budget year that begins July 1.

Missouri’s public schools will get $3 billion in basic aid. That’s the same amount as the current year but about $180 million short of what is called for under the state’s school funding formula.

“When states around this country are cutting money that goes directly to elementary and secondary education, the state of Missouri was able to keep it flat, and I think that’s the first and foremost thing we’ve done in this budget,” Silvey said.

“We did the best we can do,” added Rep. Mike Thomson, R-Maryville. “I wish I could say we are adequately funding our education. I can’t say that.”

The school transportation allotment of $108 million, which provides funding for busing, is about $45 million less than what schools were supposed to get this year, but about $10 million more than what they actually got after Nixon’s budget cuts.

For the second straight year, public colleges and universities will see a decline in basic state aid, though it will not be as large as originally proposed. The budget plan outlined in January by Nixon would have reduced their core budgets by 7 percent. The budget approved Thursday includes a roughly 5.5 percent cut.

“Would we like to put more money into higher education? Absolutely,” said Rep. Sara Lampe of Springfield, the ranking Democrat on the House Budget Committee. “But this state is going to have to make some decisions about how to bring money into the state before we do that.”

Republican legislative leaders and the Democratic governor ruled out any tax increases. But the budget counts on some non-traditional revenue sources. For example, Missouri’s main college scholarship program depends for the second straight year on the transfer of $30 million from the proceeds of the Missouri Higher Education Loan Authority, which services college loans from students across the country.

Some lawmakers also bemoaned that the budget still relies on hundreds of millions of federal stimulus dollars, which will either have to be replaced with state dollars or counteracted with cuts in the 2013 budget.

“We’re not addressing the structural hole in our budget, we are kicking the can down the road in the hope that our economy is going to rebound,” said Sen. Jim Lembke, R-St. Louis.

The final budget proposal backs away from some cuts that had been proposed by the Senate. For example, it continues to fund the Missouri Rx Plan, which covers half the deductible and prescription co-payments for 226,000 low-income seniors and disabled residents enrolled in the federal Medicare program. But lawmakers will have to also pass a separate bill reauthorizing the program to continue after Aug. 28.

Budget negotiators also opted against restructuring the state’s child-care subsidies for low-income parents. The plan would have reduced payments for several thousand children in exchange for expanding eligibility to a few hundred children whose parents are transitioning to better-paying jobs.

Among the cuts in the budget is a $1.6 million reduction in state aid to conduct property assessments, which help set a property tax base for local schools. The cut lowers the per parcel reimbursement that county assessors receive to $3.41 — only slightly above the $3 minimum set forth in state law.

The budget also axes the salary of the chef at the Governor’s Mansion. Silvey suggested the governor could order catered meals when entertaining guests. And the budget attempts to stop Nixon from billing other state agencies for the costs of his airplane flights and staff — giving him a $200,000 travel budget and allowing him to allocate costs only to the Department of Public Safety, which Silvey said would accommodate urgent travel such as responding to natural disasters.

The budget includes a $1.1 million increase for the state’s oversight of dog-breeding businesses, which have been a focal-point of controversy in Missouri. Voters last fall approved stringent new requirements for dog breeders, but the Legislature and governor this year repealed some of the key provisions and rewrote other parts of the law. They linked the increased funding for state inspectors and enforcement efforts to the separate legislation overhauling the voter-approved law.